Public hearing set for Rockford’s 33rd TIF

ROCKFORD — Residents will get the chance next month to either support or speak against the creation of the city’s 33rd tax increment finance district.

A public hearing will be held Jan. 27 on the proposed Auburn Street TIF that would encompass several small shops, restaurants, businesses and strip malls near Auburn High School.

TIF districts capture a portion of future property taxes from the businesses within the boundaries and use it to fund redevelopment projects.

The busy but hard-hit stretch includes the former Department of Motor Vehicles office near Central Avenue and two former industrial sites — the former Amerock building at the corner of Auburn and Central and what used to be a lumber yard on Kilburn Avenue.

The area fits every definition of what a TIF district is designed to help fix, said Alderman Tim Durkee, R-1, who heads the city’s planning committee.

“All of us see the need for it,” he said.

Two developers are interested in the old lumber yard and former Amerock building, Durkee said.

But he couldn’t say how close the sites are to breaking ground.

The Auburn TIF proposal has the support of the West Side Business Association and many business owners on Auburn Street.

Bill Hoople, owner of Wayne’s Feed Store, a lawn, garden and pet store that has been on Auburn Street for 50 years, said the site has needed the redevelopment boost for more than three decades.

Here’s what you need to know:

What it would do

The TIF would freeze property taxes inside the district sent to all taxing bodies — except the city — for 23 years. Developers would then front money to buy or remodel properties and pay for infrastructure improvements. If those properties increase in value, additional tax revenue that would normally go to the taxing bodies is instead given to the developers to pay back the debt incurred for the improvements or to fund other redevelopment efforts.

Pros

The TIF could spur development in an area that may not attract it if left alone. With 20 vacant buildings and two empty industrial zones, the site’s property values have dropped during each of the last five years. While a TIF won’t transform an area on its own, it could help create some jobs and fill vacant buildings. At the very least, a TIF could help keep the blight from spreading. If the city could find users for the old lumber yard or Amerock building, it could ultimately raise property values in the area, making a stronger tax base for the city, school district and other bodies. If left alone, the creeping blight could continue to snowball.

Cons

When a TIF is created, the tax burden doesn’t go away, but shifts to the rest of the city. When taxing bodies increase their property tax levies, which happens often, the TIF’s portion of the increase is picked up by the rest of the city.

And TIF districts ultimately rely on property values going up, which hasn’t always happened for Rockford TIFs. When property values stay flat or decline, it leaves no increment for developers to reinvest. That’s made worse when the city invests money up front expecting to get paid back through the life of the TIF. In that case, the city has to take money from its general fund or more successful TIFs to pay off the debt.

Collectively, the city’s TIF districts are on track to drain $2.75 million from the city’s coffers each year until 2024 and not break even until 2034, according to city records.

But the city ended the practice of investing money up front a few years ago, and now operates on a “pay-as-you-go” model.

What’s next

A public hearing will be held at 6 p.m. Jan. 27 before the City Council meeting at City Hall, 425 E. State St.